Editor’s pickSoftwood lumber, more than just a shared platform between two good friends

21-07-2017
Canada,Singapore,softwood lumber

Canada and Singapore have always shared a good bilateral relationship, but trade in softwood lumber was an area that, until recently, was unexplored. Now, both countries are stepping up their game in the softwood lumber industry in more ways than one.

Mr Champagne with Dr Koh Poh Koon, Singapore Minister of State, Ministry of Trade and Industry & Ministry of National Development

As one of the foremost exporters of high-quality softwood in the world, products from Canada’s globally competitive lumber industry meet robust standards, and are exported to more than 140 countries.

With more than 600 mills producing softwood lumber in Canada, the lumber industry is one of the biggest in the country, and one of the main pillars the Canadian economy leans on. According to the Government of Canada, in 2016, Canada’s lumber industry generated some CAD$22 billion in gross domestic product (GDP) and, in 2015, employed more than 200,000 workers.

But in April 2017, the United States, one of Canada’s traditional main export markets, placed a 19.88 per cent tariff on softwood lumber imports from Canada. An additional 6.87 per cent in preliminary average anti-dumping tariffs was added in June. The industry now faces average duties of about 27 per cent.

While the country’s other traditional main export market in Northeast Asia will continue importing Canadian softwood lumber, since 2002, the export of softwood lumber to Southeast Asia has been on the rise, and Singapore, viewed by many as the gateway to Asia, is one of the countries Canada has decided to focus on as a priority.

The driving forces

While many would likely see the tariffs the U.S. imposed on Canada as the main reason behind Canada’s recent trade expansion efforts – numerous cabinet ministers from Canada have recently been extensively deployed to multiple countries, promoting Canadian wood products – there were many other forces at play.

Canada’s forestry industry is one of the most innovative in their economy, frequently developing new technologies and products that meet, and even exceed, stringent performance, safety, and environmental standards.

And while the U.S. market is recovering, as shown by a slight upward bump in the monthly softwood lumber exports report from Global Affairs Canada between the months of April and May, conditions are still far from certain and stable, especially with the U.S. withdrawal.

Instead, Canada has chosen to use the opportunity to diversify its trade relations with other countries, actively working to enter new markets.

Singapore, a strategic gateway

Canada and Singapore have always enjoyed a warm and friendly bilateral relationship, characterised by cooperation in a wide range of areas that include security and defence, science and technology, and even Arctic matters.

In fact, when Singapore gained independence a little more than half a century ago, Canada was one of the first countries to establish diplomatic ties with the city-state.

In 2016, Singapore and Canada’s trade relationship yielded US$2.3 billion, but trade of softwood lumber had not been one of those areas, until now.

Over the past year, wood has gone through a renaissance of sorts, and interest in it as a construction material is on the rise with the completion of buildings such as the 18-storey Brock Commons at the University of British Columbia.

And with economic uncertainty never far away, especially with the U.S. withdrawal from the Trans-Pacific Partnership in March, opportunities to explore new markets have never been better for Canada.

And Singapore’s location right in the middle of one of the most important trade routes in the world, combined with the amicable diplomatic ties between the two nations, make it the perfect place for Canada to begin pushing trade of softwood lumber into Southeast Asia.

“There are real opportunities for Canadian exports,” Mr Champagne said.

The objective

With an eye on developing the demand for quality softwood in the region, enhancing trade, and market diversification, Canada is increasing efforts to raise the profile of Canadian softwood as part of promoting the clean-growth economy, drawing attention to its many merits and engaging local companies and stakeholders who hold vital roles in developing consumer demand for Canadian wood products.

To reflect Canada’s resolution on the matter, before the Minister’s visit, Parliamentary Secretary to the Minister of International Trade Pamela Goldsmith-Jones visited Singapore to meet with stakeholders in the wood industry as well.

But Singapore stands to benefit from the new trading ties as well, for not only softwood would be traded, but knowledge and information as well.

“Local industry participants stressed the importance of educating local architects and wood industry stakeholders on the nature of softwood lumber,” the minister explained. “It was suggested that Canada could do more to showcase the fact that Canadian forests are being sustainably managed. To that end, we need to enhance our efforts to raise awareness of the merits of Canadian wood.”

Canadian wood in Singapore

Because the lumber industry is one of the largest in Canada, it is no surprise that it is far more developed than generally known, with a comprehensive and diversified innovative ecosystem that features some of the world’s leading scientists and institutions.

The wood products they export, such as the innovative value-added laminated veneer lumber, are excellent for innovative green construction projects, being not only environmentally-friendly, but also durable, energy-efficient, flexible, lightweight, renewable, and cost-competitive, reflecting Canada’s transition into a green economy.

And with wood witnessing a resurgence of popularity in Singapore, Canada will be able to use their greater experience in the material to develop further interest in Singapore and the region.

All photos are credited to the High Commission of Canada. This article is the first of two parts. It was first published in Panels & Furniture Asia (Jul/Aug Issue). The second part will be published in the next issue.